SEHK:493

Stock Analysis Report

GOME Retail Holdings

Executive Summary

GOME Retail Holdings Limited, together with its subsidiaries, engages in the retail of home appliances and consumer electronic products in the People’s Republic of China.


Snowflake Analysis

Slightly overvalued with worrying balance sheet.


Similar Companies

Share Price & News

How has GOME Retail Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 493's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.8%

493

5.6%

HK Specialty Retail

5.3%

HK Market


1 Year Return

-13.8%

493

-20.5%

HK Specialty Retail

-20.4%

HK Market

Return vs Industry: 493 exceeded the Hong Kong Specialty Retail industry which returned -21.7% over the past year.

Return vs Market: 493 exceeded the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

493IndustryMarket
7 Day-2.8%5.6%5.3%
30 Day-16.9%-13.5%-8.5%
90 Day-5.5%-19.6%-14.7%
1 Year-13.8%-13.8%-16.6%-20.5%-17.6%-20.4%
3 Year-36.8%-37.3%-9.2%-19.8%-2.5%-12.3%
5 Year-57.1%-59.2%-6.2%-24.7%-5.7%-20.9%

Price Volatility Vs. Market

How volatile is GOME Retail Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GOME Retail Holdings undervalued compared to its fair value and its price relative to the market?

40.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 493 (HK$0.72) is trading below our estimate of fair value (HK$1.12)

Significantly Below Fair Value: 493 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 493 is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: 493 is unprofitable, so we can't compare its PE Ratio to the Hong Kong market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 493's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 493 is overvalued based on its PB Ratio (0.9x) compared to the HK Specialty Retail industry average (0.8x).


Next Steps

Future Growth

How is GOME Retail Holdings forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

71.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 493 is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: 493 is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: 493 is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: 493's revenue (4% per year) is forecast to grow slower than the Hong Kong market (10% per year).

High Growth Revenue: 493's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 493 is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has GOME Retail Holdings performed over the past 5 years?

-76.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 493 is currently unprofitable.

Growing Profit Margin: 493 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 493 is unprofitable, and losses have increased over the past 5 years at a rate of -78.1% per year.

Accelerating Growth: Unable to compare 493's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 493 is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (-11.9%).


Return on Equity

High ROE: 493 has a negative Return on Equity (-51.22%), as it is currently unprofitable.


Next Steps

Financial Health

How is GOME Retail Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 493's short term assets (CN¥41.1B) do not cover its short term liabilities (CN¥50.2B).

Long Term Liabilities: 493's short term assets (CN¥41.1B) exceed its long term liabilities (CN¥17.7B).


Debt to Equity History and Analysis

Debt Level: 493's debt to equity ratio (256.4%) is considered high.

Reducing Debt: 493's debt to equity ratio has increased from 10.9% to 256.4% over the past 5 years.


Balance Sheet

Inventory Level: 493 has a high level of physical assets or inventory.

Debt Coverage by Assets: 493's debt is covered by short term assets (assets are 1.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Insufficient data to determine if 493 has enough cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if 493 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is GOME Retail Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 493's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 493's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 493's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 493's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 493 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 493's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.3yrs

Average management tenure


CEO

Jun Wang (57yo)

no data

Tenure

CN¥1,156,000

Compensation

Mr. Junzhou Wang has been the Chief executive and President of GOME Electrical Appliances Holding Limited and Gome Holdings Group Co., Ltd., since June 28, 2010. Mr. Wang was an Executive Vice President of ...


CEO Compensation Analysis

Compensation vs Market: Jun's total compensation ($USD162.84K) is below average for companies of similar size in the Hong Kong market ($USD469.46K).

Compensation vs Earnings: Jun's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jun Wang
CEO & Presidentno dataCN¥1.16mno data
XiaoChun Zou
Executive Director9.33yrsCN¥338.00kno data
Wei Fang
Chief Financial Officer8.58yrsno datano data
Qiuli Wei
Senior Vice President13.42yrsCN¥6.67mno data
Jun Li
Senior Vice President8.08yrsno datano data
Yang He
Senior Vice President7.83yrsno datano data
Yi Lv
Senior Vice President2.83yrsno datano data
King Pui Szeto
Company Secretary9.25yrsno datano data
Cheng Yik
Financial Controllerno datano datano data

8.3yrs

Average Tenure

54.5yo

Average Age

Experienced Management: 493's management team is seasoned and experienced (8.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
XiaoChun Zou
Executive Director9.33yrsCN¥338.00kno data
Kong Wai Lee
Independent Non-Executive Director9.08yrsCN¥338.00kno data
Da Zhang
Chairman of the Board9.08yrsCN¥338.00kno data
Hongyu Liu
Independent Non-Executive Director6.83yrsCN¥338.00kno data
Xiu Huang
Non-Executive Director4.83yrsCN¥338.00kno data
Gao Wang
Independent Non-Executive Director4.83yrsCN¥338.00kno data
Sing Yu
Non-Executive Director4.83yrsCN¥338.00kno data

6.8yrs

Average Tenure

56yo

Average Age

Experienced Board: 493's board of directors are considered experienced (6.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 493 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

GOME Retail Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: GOME Retail Holdings Limited
  • Ticker: 493
  • Exchange: SEHK
  • Founded: 1987
  • Industry: Computer and Electronics Retail
  • Sector: Retail
  • Market Cap: HK$14.448b
  • Shares outstanding: 20.07b
  • Website: https://www.gome.com.hk

Number of Employees


Location

  • GOME Retail Holdings Limited
  • Two International Finance Centre
  • Suite 2915
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
493SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDSep 2004
GMEL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 2004
CKS2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 2004
CKS2BST (Boerse-Stuttgart)YesOrdinary SharesDEEURSep 2004
493SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 2004
493SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 2004
GMEL.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDNov 2008

Biography

GOME Retail Holdings Limited, together with its subsidiaries, engages in the retail of home appliances and consumer electronic products in the People’s Republic of China. The company is also involved in the provision of logistics and procurement, storage and delivery, IT development, and business management services; retailing of mobile phones and accessories; and online retail of electrical appliances and consumer electronic products, as well as in property holding activities. In addition, it engages in the trading of wine products. As of December 31, 2018, it operated 2,122 stores in 606 cities. The company was formerly known as GOME Electrical Appliances Holding Limited and changed its name to GOME Retail Holdings Limited in August 2017. GOME Retail Holdings Limited was founded in 1987 and is headquartered in Central, Hong Kong. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 12:36
End of Day Share Price2020/04/01 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.